A deposit purchased from a broker that acts as the agent for the depositor. Brokered deposits usually apply to large deposits with a certificate of deposit included. The broker pools these certificate of deposits and bargains them to financial institutions so that they can negotiate for a higher rate. Brokered deposits are sold by banks to the broker who then divides the amount to smaller pieces for purchase. Under-capitalized banks are not allowed to accept brokered deposits.

Due to the large number of failed banks in recent months, there’s an important issue regarding FDIC insurance depositors need to be aware of.

Depositors must claim FDIC insured accounts within a specific time period, or face possible forfeiture of their funds.

This situation occurs when you (or a deceased family member) are entitled to an account at a failed bank, and don’t know it.

How is this possible?

First, the original bank may have been acquired by one that was subsequently closed by government regulators, which occurs without advance notice. There have been hundreds of mergers and acquisitions over the last several years. For a list of failed banks and the institutions they have acquired over the years, go to: http://www.failedbankreporter.com

Second, brokered CDs and retirement accounts are on the failed bank’s records in the name of the broker, not the individual owner. It is the broker’s responsibility to initiate the claim, and the FDIC will not contact you.